NBA Top Shot’s Slam Dunk Success Rewrites NFT Playbook
There’s a new game in town that is driving fans, players and speculative investors mad. The respected newspaper the Wall Street Journal recently ran a big story about the NBA and the latest millions of dollars it was generating. This time though it didn’t involve multi-year contracts for superstar athletes like Lebron James and Stephen … Continued
There’s a new game in town that is driving fans, players and speculative investors mad. The respected newspaper the Wall Street Journal recently ran a big story about the NBA and the latest millions of dollars it was generating.
This time though it didn’t involve multi-year contracts for superstar athletes like Lebron James and Stephen Curry. Instead, it’s crypto-flavored and deals with a new digital platform called NBA Top Shot, which turns Ethereum-based video clips of the national basketball league’s best action moments by its biggest stars into limited-edition digital collectibles called NFTs.
The NFT market is currently out of control, with a Beeple digital artwork by a graphic designer yesterday selling for a mind-numbing $69 million on the Christies auction platform.
Please note that this article is not financial advice and for educational purposes only. Please invest wisely if you, especially as prices are so inflated right now.
What is NBA Top Shot?
NBA Top Shot is a blockchain-based digital collectibles platform that allows users to buy, sell and collect officially licensed NBA video highlights. Developed by Dapper Labs (of Crypto Kitties fame), the Ethereum-powered platform is a joint venture between Dapper Labs, the NBA Players Association, and the National Basketball Association (NBA).
It has been overwhelmed by demand, processing $250 million in sales from over 100,000 buyers in February 2021 alone, and seen the prices of rare Moments go stratospheric.
What are NBA Top Shot “Moments”?
NBA Top Shot “Moment” NFTs are non-fungible tokens built on the NBA Top Shot trading card platform, which provides a unique marriage between cryptocurrencies and a new type of sports cards, video clips highlighting the best shots in the NBA field, that are owned by the investors who buy them. A single NFT represents a single clip called a Moment.
Each NBA NFT features 3D animations and players’ information. Notably, each card is scarce, authentic, and secured using decentralized ledger technology (DLT). Note that NFTs usage applies in circumstances that need proving virtual scarcity and ownership.
The player and the quality of each clip determine the Moment’s price. Therefore, the more prominent NBA stars have a higher value than lesser-known players.
Each Moment has a unique identifier that shows how many of such clips exist. As such, the identifiers determine the quality with specifically the higher numbers (like top 100 numbers out of 15,000 for example) and of course the number matching the player’s jersey number boosting the NFT’s value tremendously.
Additionally, the Moments sport names like “Metallic Gold,” “Holo,” and “Cosmic” to rhyme with physically trading cards with a limited edition.
Investor turns $175k into $20 million
One investor, Michael Levy, was using Twitter in September last year when he came across Top Shot. He immediately connected the dots and saw the potential. Levy bought $175,000 over the next few months. His investment’s value now stands at a whopping $20 million and is expected to keep going up. That’s why Levy says he’s not selling.
Why is NBA Top Shot so popular?
Following Dapper Labs’ success with the experimental Crypto Kitties project (which severely congested the Ethereum blockchain in 2017), the company decided to target new markets. The NBA and its young and tech-savvy players and fans made the ideal customer.
Packaging its Top Shot Moments into a slick platform of airdrops, limited sales and stunning visuals, the platform is attracting incredible hype not only from fans, who are digital natives used to sports fantasy leagues and trading players for money, but also the NBA’s biggest stars, who have joined the fun and are trading Moments with other players like they would jerseys.
The user experience on the platform is so smooth and non-technical that arguably many investors don’t even know they’re dealing with cryptocurrencies!
The Meteoric Rise of NBA Top Shot
The NBA Top Shot platform recorded a meteoric rise in February 2021 when its numbered clips attracted investments to a tune of $53.9 million within one week. In the same 7-day period, it registered 33K new sign-ups.
From Jan 20 to Feb 20, 2021, the platform recorded a 1,129% increase in sales to reach $106.3 million compared to its previous month.
Interestingly, LeBron James NFTs were the priciest during this time, with a single Moment retailing for a minimum of $100K. Note that the developer takes 5% of P2P sales.
Some NBA Top Shot NFTs proponents like Mark Cuban castigate conventional ways of collecting rare items such as stamps and sports cards due to low security. Fortunately, Cuban noted that with Top Shots, “you have all the fun” without worrying about the risks in the traditional collectibles scene, but the “laws of supply and demand” still apply.
Notably, the NBA is the most technologically-keen leading sports league in America, and its shift to NFTs was among its plans.
NBA and the NBA Top Shots NFTs developers are looking to introduce more functionalities once coronavirus’ fierceness tanks.
Among plans in the pipeline include introducing a Pokemon Go-themed feature. Consequently, fans would attend live games and get rare Moments. Furthermore, Dapper has a mobile game in the works that would turn Moments into in-game purchases. You can unlock these purchases on games such as when interacting with FIFA using the ultimate team mode.
How NFTs Became Popular
New entrants wonder what the fuss is all about. After all, YouTube is full of free LeBron’s hot Moments. While this assumption holds some water, NFTs started gaining popularity for some core reasons.
One, NFTs are simple enough for non-cryptocurrency holding individuals to grasp. Two, they guard against duplication of digital items using blockchain technology. These two qualities open up the ecosystem to new audiences, hence, the popularity.
However, their prominence in the sports arena comes from the fact that an average person is more into sports like basketball instead of industries like decentralized finance (DeFi). Consequently, more people who didn’t care about Bitcoin and its friends join the space.
The popularity of the NBA Top Shots NFTs cements the place for non-fungible tokens in the sports industry. Notably, by building a link between the traditional sports card scene and blockchain‘s immutability, NFTs help attract non-crypto players into the cryptocurrency ecosystem. NBA Top Shot’s success will undoubted open the floodgates and we can expect a plethora of other sports, entertainment and music memorabilia to follow in its digital steps soon. In recent days a Muhammad Ali collectible was released while the new Kings of Leon album launched as an NFT.
Taking a leaf from Bitcoin’s popularity as digital gold due to its limited supply, NFTs take the law of scarcity to the next level, providing a perfect new investment platform next to existing instruments like crypto staking for a new breed of investor.